Australian dollar (AUD) slides amid risk-off flows
The Australian dollar (AUD) closed last week’s session on a sour note, with the currency running afoul of a deteriorating market mood.
The negative shift in risk appetite was attributed to a stronger US dollar (USD) and waning expectations for additional stimulus measures from China.
Market risk dynamics will likely dictate movement in the ‘Aussie’ today, in the absence of any notable domestic data.
New Zealand dollar (NZD) pressured in cautious trade
The New Zealand dollar (NZD) also softened on Friday amid the decline in investor risk sentiment.
NZD data is also in short supply today, leaving the ‘kiwi’ to trade on wider market trends.
Pound (GBP) slips on retail sales miss
The pound (GBP) stumbled at the end of last week’s session in response to a weaker-than-expected retail sales print.
While GBP investors were relieved to see sales growth rebound in June, following May’s abysmal figures, the recovery fell short of expectations, leaving Sterling vulnerable to further losses.
The Confederation of British Industry will publish its latest distributive trades index later today. If the gauge for retail sales volumes reports another sizable contraction, it could extend the GBP selling bias.
Euro (EUR) supported by transatlantic trade deal hopes
The euro (EUR) firmed on Friday, supported by hopes that an EU-US trade deal may be within reach.
Aiding the single currency were tailwinds from the European Central Bank’s (ECB) latest interest rate decision and the relatively hawkish tone struck by ECB President Christine Lagarde.
EU-US trade talks will be firmly in the spotlight this week as Trump’s 1 August tariff deadline looms. If a deal is reached, the euro is likely to strengthen.
US dollar (USD) bolstered by trade optimism
The US dollar proved to be one of Friday’s best performers, with currency rallying amid hopes we will avoid another ‘Liberation Day’ style later this week, after the US signed a series of bilateral trade deals.
USD demand also continued to draw support from Thursday’s impressive PMI figures, which pointed to surprisingly resilient demand within the private sector.
The US dollar is also likely to remain sensitive to US trade developments at the start of this week, with the uncertainty surrounding negotiations with the EU potentially infusing some volatility into USD exchange rates.
Canadian dollar (CAD) buoyed by strengthening oil prices
The Canadian dollar (CAD) ticked higher on Friday, with the commodity-linked currency supported by rising oil prices.
Expect the ‘loonie’ to remain sensitive to oil price dynamics amid a lull in notable Canadian data at the start of this week.
Data Releases
20:00 GBP Distributive Trades (Jul)